Three possible reasons why Cardano has skyrocketed 30% in 7 days

Three possible reasons why Cardano has skyrocketed 30% in 7 days

Cardano’s price has been on fire over the past week. The cryptocurrency gained a whopping 30% during this time. Even though this is true for most of the market, ADA is still the best performer among the top 10 coins by total capitalization.

And while Charles Hoskinson recently revealed that his new healthcare facility will be operational in a month and will also accept ADA as a payment method, let's take a look at three more realistic and possible reasons for this rally.

The total value locked in Cardano is increasing

The first metric to consider is the TVL (Total Value Locked) in various protocols operating on the Cardano blockchain. Data from popular analytics resource DeFi Llama shows that TVL has increased by almost 40% since the beginning of 2023.

At the time of writing, it stands at around $67.29 million, with Minswap holding the lion's share of that at more than $27 million.

It is also worth noting that most of the increase also occurred in the last 24 hours when TVL shot up by around 20%.

DeFi llama

DeFi trading volumes are skyrocketing

Another important metric to look at is the total transaction volume on Cardano-based DeFi protocols. It will have risen significantly again in 2023.

In the last seven days alone, transaction volumes increased by around 57%, while Minswap alone saw an increase of around 76%. It is also the market leader, as somewhat expected.

DeFi llama

It is also worth noting that trading volume on centralized exchanges has also skyrocketed with this latest move and currently stands at around $850 million in the last 24 hours.

Market hype surrounding the upcoming launch of Algo stablecoin DJED

Another thing that could have driven the price of Cardano's ADA is the hype building around the launch of the highly anticipated algorithmic stablecoin called DJED.

AsCryptoPotatoAs previously reported in November 2022, DJED is expected to see the light of day in January this year. It is the most ambitious plan yet for an algorithmic stablecoin based on Cardano.

Here's how it works: Users can send ADA to a specific smart contract address on Cardano and receive the same dollar value of DJED in return. You can also burn DJED to get ADA.

Algorithmic stablecoins had their worst year in 2022 with the collapse of the entire Terra Luna ecosystem. However, anticipation for the event is still building and this could be one of the reasons for the recent surge in ADA price.

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